While claiming that most of the European vehicle industry may have perceived the new European Union block exemption regulation as a threat, Mitsubishi Motors Europe (MME) said on Wednesday that it has embraced the new rules willingly, believing that the new rules offered an opportunity for a global overhaul of its sales and after sales organisation.
As part of its six-point turnaround strategy, MME has acknowledged the importance of distribution and after sales service as essential drivers to customer satisfaction and brand boosting.
Building on the claimed good reputation of its 2,700 dealers in Western Europe and the close relationships with distributors, MME said it decided to involve them in the definition of norms & standards and future contracts based on the principle of selective distribution.
This lead to a “fast-track” approach, with workshops initiated in April 2002 and final wholesale contracts signed on 19th September 2002, before the start of the implementation deadline set by the European authorities.
At retail dealership level, this turnaround process resulted in two major decisions, the company said.
Firstly, there was no pan-European structural termination (only in a few selected countries out of 17 was a network restructuring needed, according to local circumstances).
Secondly, MME and local distributors conducted a pan-European audit of all dealers and reached mutual agreement on action required, which was added to the new retail contract.
MME said this resulted in virtually all retail contracts being signed before the October 1st, 2003 deadline, with support from local dealer associations, including the European Mitsubishi Dealer Association (EMDA).
MME also said its dealers, committed to the new contract and action plan, will all benefit from a further incentive to raise their profile, as MME has decided to pursue process-related standards (e.g. individual customer satisfaction evaluation per dealer, telemarketing activities, development of marketing plans and personal development plans) as distinct from the investment-related standards (major construction or demand of specific flooring or other building materials) favoured by other manufacturers.
“This different and pragmatic approach will allow Mitsubishi dealers to focus their attention on proper launches for the 14 new models to come over the next five years while gradually upgrading and investing in facilities and corporate identification, but also training and personnel, in line with their earning potential over the coming years,” MME said in a statement.
Although initially aimed at EU distributors and dealers within the block exemption context, the new strategy will also be extended in time to Mitsubishi’s other distributors world-wide so that customers experience a consistent standard from all retail dealers.
Mitsubishi Motors Europe president & CEO Stefan Jacoby said: “We try to look beyond the accepted conventions of the automotive business.”
He repeated MME’s objectives of 300,000 sales in 2007 and profitability at all levels of the distribution chain.